IMO Boys Town $5 MS sellout is very concerning for hobby
2manycoins2fewfunds
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It certainly confirms what we have learned from the First Spouse series..........
There are far fewer than 3,000 collectors of most modern gold $5-$10 MS commemoratives.
Almost certainly less than 1500 when you take out dealer inventory, flippers and those who bought duplicates with plan to keep only those which graded MS70
What is needed now is a spike in gold prices to above $2,000 which should let a lot of surplus $5 and $10 coins be melted reducing overhang and rekindling interest in general.
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You are assuming that EVERY collector who buys the modern commemorative coins buys them all, which is not necessarily true. Some collectors buy certain pieces that interest them and skip the other pieces, especially the gold coins, which are all quite pricey for middle class budgets.
Frankly I have not heard of or thought about Boys Town since the 1950s and early ‘60s. It got some press in the books and magazines I saw back then. Since then it’s been “out of sight, out of mind” for me and probably a lot of other people. Just because only a small of collectors were not interested in an expensive coin that commemorated a less than well known organization does not reflect a decline in the hobby.
Another problem is there are too many modern commemorative coins that, by necessity, cover less than stimulating topics. Most collectors simply don’t have the money to keep up with this stuff, especially if they have an interest in other coin series.
"Another problem is there are too many modern commemorative coins that, by necessity, cover less than stimulating topics."
This is why excitement over crowning "keys" based on low mintages seems passé to me. There are so many very low mintage items now in the First Spouse and Commemorative series because of the Mint's over-burdening the market. There are loads of items sub-5000, and within 100 or so of one another.
Here's a warning parable for coin collectors...
This is why I collect coins and not postage stamps.
No Way Out: Stimulus and Money Printing Are the Only Path Left
I do not find the Mint's offerings attractive at all the past decade or more...They have become the novelty shop of numismatics.....and flippers try to generate fever with special offerings - and succeed to some extent. Then, those who purchased the 'hot' item, sit back and watch their value diminish and end up buried in a coin that, in their lifetime will never achieve the flip price again. Cheers, RickO
We used to consider the USPS and the Canadian Mint offerings as way too many and kitschy... but if you get right down to it, that is now where the US Mint is also. Curved planchets, a zillion different finishes, compelling individuals to purchase multiple sets to be able to obtain certain finish coins, etc.
But... I guess they consider themselves to be a business... and a business sells what individuals will buy....
I would say there are fewer than 3K hardcore collectors.
If the design is liked, it will do well. (e.g. the Baseball Commem. I expect the Moon commem will do well, too.)
I bought the $5 Twain commems because I liked 'em. Wouldn't touch the $5 Boys Town. (Or the $1 or the half for that matter...)
The assertion that declining mint sales numbers is a canary in the coal mine for the hobby is predicated on the hobby taking a constant interest in mint products as compared to other stuff. In reality, it could be that a decline in mint sales comes as the hobby strengthens and shifts it preferences away from Congressional fund-raising programs with uninteresting themes and gimmicky manufacturing techniques and back to coins made for circulation.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
Mmmm... Like the stock market. It's much more attractive right now than paying $100 over spot for a 1/4 ozt of gold.
Next year's WWI coin and commem set will be $100, for two ozt silver. (About $31.50 worth of silver at today's spot.)
A price adjustment that more aligns with reality would probably improve things.
Here is a question....how many modern gold coins sell for more than issue price if graded MS/PR69??
One problem with these ever declining mintages is they erode the value of prior 'Keys' with Jackie R. as an obvious example.
Regardless something has changed.
Up to just a few years ago $5 gold commemeratives routinely sold 8-10,000+.
How many people see the boys town or spouse coins designs and go “OMG I have to have that!”
I believe the hobby remains fine for attractive coins.
Lower mintage numbers will continue with unattractive Mint designs.
Do you have any data to back this up?
There does not appear to me, as a part-time dealer, that there is any increased interest in classic series like large cents or Morgan dollars, for example. There is still interest. There is interest in premium material. But I don't see any growing interest or growing collector base overall.
I'll let you continue the count on my hands in case you need to exceed 10.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
Simply feel OP isn't looking at things correctly. OP's title is worded bizarrely too.
The gold $5 is not a good litmus test. One should probably look at the demand for silver dollars.
People have less discretionary income at this time. When things are a bit tougher, people gotta make hard choices. If tougher times go on for a while, people may permanently alter their previous spending habits. To keep spending, some people are still leaning on credit cards and home equity lines of credit, but not like they did before 2007-2009. Most people who got out of that spending trap have chosen not to go back in.
Finally, the Congress must limit these specific organization-supporting commemorative programs to groups that can demonstrate that their membership stands ready to buy some significant number of coins. This is very important. Does anybody think that even 5,000 Lions Club members bought a silver dollar for themselves? I don't.
Which reality? The intrinsic value reality or the cost of production reality? I think you underestimate what the fixed costs of design and production are for a limited edition item.
These keys and semi-keys only matter to flippers . Why would people that collect things they enjoy care about keys? Kill off the flipper's business model , empty their wallets or put them in concussion protocol and the sooner the better for the enjoyment of actual collectors.
Note that when I say keys , I mean modern dreck. If you are talking barber halfs thats a different story.
I have no data for this, which is why I said that it could be the case. Interest in mint products and robustness of the hobby aren't necessarily correlated.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
I agree, and a similar thing happened with commem halves in the 1930's. Lots of gimmicks (such as multi-year, low mintage runs) and declining interest overall, while the hobby itself continued to be healthy.
My Adolph A. Weinman signature
I only picked up the Boys town & Lion coins because of the low mintage, but frankly they are awful looking coins. Perhaps many just don't buy ugly coins no matter what.
Best place to buy !
Bronze Associate member
The Boy’s Town dollar coin is actually pretty pleasing in hand..
Thank goodness i kept my bitcions instead of buying the $5 gold coins.
It is very concerning for hobby that so many coins with low interest are being made. It might be worthwhile to slow down the commemorative program a bit. Some options would be to have fewer overall sets or space apart the gold coins more so fewer sets have gold coins.
Of course, if the programs are still making money for their intended purpose, then perhaps, it's not so bad?
Here are some photos of the half eagle:
Agreed, but I'm not sure how many coin collectors will pay for it.
The reverse of the silver dollar reminds me a bit of the Charter Oak on the obverse of the Connecticut commemorative half.
I have no clue what boys town is....lol
Here's some info on Boys Town from Wikipedia:
Numismatics is an amazing tool for dispelling one's lack of knowledge, but it's not so helpful for those who revel in their ignorance.
It's only concerning for collectors of modern bullion coins....or those who presumed there were more of those collectors than there actually are.
Gold's gold.
When gold takes an upward spike, they'll be an interest
Here's a warning parable for coin collectors...
Most actual collectors want proofs. Current sales of the Boys Town gold proof, including those in three-coin sets, is 6820, more than double the sales of the unc. That's really low for a proof gold commem, which may turn out to be the better value down the road.
My Adolph A. Weinman signature
What is the lowest mintage proof commertive and its price In 70 and 69 ?
Thanks
Martin
The way I see it, all of us will be dead and gone when these $5 coins will become very popular with collectors. They will post things like: "I cannot believe these beauties ever sold for below melt! Darn, I would have bought all I could get. Wonder what the actual mintage is? How come this coin with a mintage of 12,000 costs more than these with only 4000 made.
Not sure, but it's likely a recent one. The Boys Town may dethrone whichever one it is. None of the proof gold commems are real stoppers, according to the price guide.
My Adolph A. Weinman signature
If you want to be concerned, be concerned for the hobby as a whole.
The aging collectors are selling off holdings or substantially reducing purchases of all coins, classic and modern.
Ive seen what is happening at very frequent and well attended shows, coins offered at very reasonable prices were being passed over—-this concerns me
I look now to only acquire items that have both high intrinsic metal value and have a numismatic “play” as well—and carry a very small premium (in terms of dollars)
The items that generally fit the bill are “rare“ moderns
The BT 5 Unc Gold is shaping up to be a very rare modern. It’s nearest competition is 2,000 Coins north of it.
True for $5 gold, but some First Spouses and Platinum Eagles are scarcer.
My Adolph A. Weinman signature
You need only look at what's going on in the stamp market to be concerned about the coin market. Still largely an old man's hobby. Better with coins than stamps. Coins are scarcer than most stamps, but ultimately it is still a supply and demand issue. In the end, every time an old-time leaves the planet, you have more product on the market and fewer hands chasing the product. Even relatively scarce stamps like the $5 Columbian (20,000) have dropped by a factor of 3 to 5 in value over the past 20 years.
For what it's worth, the APS membership slid from 100,000 to 30,000-ish. ANA membership is 25,000-ish.
You can argue that bullion is a separate market and more robust than coins. But that still doesn't encourage me about the long term value of coins with numismatic premium...especially already unpopular moderns.
IIRC, Stamps had the big problem with former systematic overvaluation(s) in the Scott Catalogs and the shock to that hobby when a new owner of the catalog series tried to change the valuations into something more realistic.
Stamps also had a much bigger problem with the oversupply of modern dross - kinda like our problem with clad proof sets, but much bigger and earlier.
I can recall many nice World Crowns (and other specific coins too) at one-half and even one-third of today's levels, so 'reasonable prices' is clearly in the eye of the beholder.
Today's market clearing prices may well have to be lower than what the present owners consider 'reasonable'.
I can remember BIG speculation in the Jackie Robinson and FDR $5 gold (I still own four FDRs). Those things 'fit the bill' once upon a time, too.
The U.S. Post Office ruined the stamp hobby with too many issues that had mediocre to poor designs. Plate blocks grew from four stamps to an entire sheet. Collectors got sick of this and abandoned the hobby. Values fell for everything, including the classics.
I hope that our hobby can avoid this. The politicians are doing us no favors by issuing too many commemorative coins and “limited edition rarities” that mostly end up in the hands of flipper - opportunists.
I don’t think any collector should feel obligated to buy every commemorative the government issues. The situation is just as bad as it was in the late 1930s when private distributors were receiving low mintage commemorative half dollars and playing games with the distribution of those coins to squeeze the last dollar out of collectors.
Our defense is to buy only the coins that interest us, and avoid the siren call of flipper – promoters. If you think that the First Spouse coin series is interesting, buy them. Right now, you should be able to obtain a lot of those coins at near melt. If you think that these coins are superfluous and should never have been issued as I do, pass and don’t feel guilty. You can’t collect everything. Collect the coins interests you.
On the contrary. I know exactly what the Mint Store's revenue and expenses are.
Last year, the most dismal year in terms of net income for the last decade for the mint was $34.5 MILLION. Their average net income over the last 10 years is about $65.5M/year. What's dragging that number down are the Annual set losses. The production cost of the annual set should go down this year with the elimination of the prezzibuck, so I expect the annual set loss to be less and net income to rise in 2017 and beyond. The net income number may seem a bit small, but remember, they pay no taxes so they're better than they look.
They're a store, but a store that doesn't need a profit. They just don't need a loss. The profits made by the mint store is less than a fraction of a rounding error in the grand scheme of the Federal Government, and is really irrelevant in the overall budget. The mint could shave their margins on gold and silver products (which is where most of their revenue comes from), and still survive within their charter, saving the actual consumer of the product a few bucks rather than dumping it back into Treasury's budget.
Of course, that's just me. Your mileage may vary.
Go ahead. Call your congressman to get the number of commems reduced. Let us know how it went.
Of the two commems per year, usually only one gets a gold option.
The big mistake the mint admits to is having two service organizations as commems this year. (The second commem is usually a person or event.) Sucked all the wind out of the commem program this year. It'll be interesting if they sold enough by Dec 31 to cover costs.
There's usually wording in the law that says that if sales doesn't exceed production costs, the intended benefactors gets zip.
I think the Girl Scouts got stiffed, and one other, maybe Civil Rights?
That's why I've said that they'd have sold a lot more if they put Mickey Rooney on one of the coins...
One picture is worth 1,000 words........
A crowd rushes the bourse as the Central States Numismatic Society convention opens to the public April 27, 2017. Early birds were allowed onto the bourse floor a day early. Image courtesy of Gerald Tebben.
Image courtesy of Gerald Tebben. Coinworld
good thing flipping coins isn't an athletic activity
That settles it. I'm going all in before the Millennials catch on and drive coin prices to unimaginable heights!
My Adolph A. Weinman signature
You'll have to accept Apple Pay
The BT mint State Gold reminds me a lot of the 2001 Mint State Capital Visitors Center $5 Gold Commem. Most everyone did not like the design of the coin (very similar reactions at that time to what we are seeing here with the reactions to the BT design) and it sold only 6,761 units at the Mint. I came on these message boards for the first time around then and, at the same time was consigned a load of the coins in PCGS MS70 grade by a large dealer who told me to price them at whatever I was comfortable with. I priced them for a little over Mint issue price for a raw coin plus the cost of grading and, of course, they sold out quickly (and I made some quick new “friends” here as well). Shortly thereafter the price doubled on the MS70 coins and by 2011/2012, MS69 coins had reached $2,500/coin at major auctions such as Heritage. Anyone with a 10 year hold on this coin who bought it raw from the Mint (or slabbed from me here on these boards) enjoyed roughly upwards of a 500% return during that period.
Then, mintages started dropping and dropping (6,761 did not mean that much as a consequence), a major buyer of the coins stopped buying (and probably a few more reasons I could name if I thought about it long enough) and down they went in price for those who failed to sell during that couple year “window” where all anyone had to do was simply put their coin up for sale at a major auction and it would sell for astounding money.
As Eric Jordan put it on page 125 of his book (speaking of these low mintage $5 Gold commems):
“... immature keys have seen a five to 15 fold increase over the last seven to 10 years. While this set may not be overvalued, it has become expensive and its growth rate is going to see a dramatic reduction from now on. LOOKING BACK THROUGH COINAGE HISTORY 5,000-6,000 POPULATION TYPE COINS ARE NOT NORMALLY WORTH MUCH MORE THAN $5000 LONG TERM...” (emphasis added by Eric not me).
We will likely know on Tuesday the mintage of the BT coin (before deducting returns down the line). If, repeat, if the coin comes in around 3,000 - 3,300 mintage (or lower), that would be, IMHO, a very difficult mintage to “beat” later. I simply could not imagine another $5 Gold Commem coin with so little world wide appeal that it sells just, say, 2,500 coins barring a catastrophic financial event in our economy perhaps. But, maybe I am just not thinking hard enough this Saturday morning.
As always, just my two cents.
Wondercoin.
That number doesn't tell me much of anything that I'd need to know. Net income reflects CURRENT pricing, which is your bone of contention. What is the fixed cost of a limited edition run of, for example, 100,000 coins?
I don't know the numbers and am not currently interested in looking them up. But, if the fixed cost of creating designs, dies, etc. is $1 million. Then that's $10 per coin above intrinsic metal value. If the cost of packaging is, for example , $10 per coin. Then I'm already $20 above the intrinsic value. So, I break even at around $40 per 1 oz silver coin if I can sell 100,000. If I can sell 200,000, the scale only cuts $5 off the break even price. You get the idea.
So, doing some math here - still not exactly what I want.
Net profit averaging somewhere around $50 million in the last 10 years. That represents around $7 per numismatic item given they averaged around 7 million units shipped. Right off the bat, there is not a ton of fluff in their pricing.
But, let's return to annual sets. I don't know which ones make money and which ones lose money, BUT consider the following:
Quarter proof sets - $1.25 face value - $14.95 sale price
Silver quarter proof sets - $15 intrinsic value - $32 sale price
Clad proof sets - $2.91 face value - $26.95 sale price
Silver proof sets -$1.06 face + $25 intrinsic - $47.95 sale price
Mint set - $5.82 face - $20.95 sale price
These sets still sell hundreds of thousands of units using EXISTING DESIGNS and hubs and yet they LOSE money despite being priced at $13 to $25 over "intrinsic value". When you add in the cost of creating new designs, new hubs, new dies, possibly special packaging and a more limited issue of 100,000 or less to spread those costs over, I would not be surprised if the COST of your "two ounces" of silver isn't $40 or $50 over spot price.
This past week a dealer was offering a couple dozen different $5 modern gold commemoratives graded Proof 69 and half a dozen graded Proof 70. The 69's were sold right at melt and the 70's were $3 over melt. The 70's all sold within a day except for a Statue of Liberty. I didn't see where any of the 69's had sold on Friday.
At these prices he must be buying at $20 or more below melt for graded PCGS or NGC coins.
Typical wholesale is 95 to 98% of melt
because on some practical level the market realizes those grades are worthless. There is no reason to grade a melt value coin in the first place. The mint sold them above the price of the metal so its a win for them. PCGS made money grading them so its a win for them . Its all the other pigeons that get slaughtered. Sort of a slow motion ponzi scheme.
As far as the 70's all selling instead of the 69's that just proves the marginal value of a 70 is worth a cup of coffee these days.